WASHINGTON — Rep. Bill Pascrell, D-N.J., keeps a Lucite-encased drinking-water pipe section on a table in his Capitol Hill office.
The pipe is tuberculated, meaning it has built-up sediment that reduced the flow of water volume. The National Utility Contractors Association provided Pascrell with the pipe years ago in recognition for his support on issues the group cares about and the New Jersey Democrat has shown it on the House floor, said NUCA director of governmental affairs Will Brown.
"The pipe exemplifies the condition of time worn infrastructure buried beneath the streets of local communities across the country," said Bruce Morgan, a principal at Water Policy Associates and the executive director of the Sustainable Water Infrastructure Council.
Pascrell, who was first elected to Congress in 1996, noted that water main breaks can be damaging for residences and businesses. "We're talking about a very serious and urgent problem," he said in an interview with The Bond Buyer, part of a series of profiles of members of Congress.
Billions of dollars are needed for water infrastructure and there needs to be a way to finance water improvements, the congressman said. So Pascrell has repeatedly introduced or co-sponsored legislation called the Sustainable Water Infrastructure Investment Act, most recently this year (H.R. 499), to exempt water and wastewater private-activity bonds from state volume caps.
Pascrell's water PAB bill has bipartisan support. He has introduced it along with Rep. John Duncan, R-Tenn., and cosponsors over the years have included both Democrats and Republicans.
"There's a great desire to move this public-private partnership further on to deal with the very basic needs of the country," Pascrell said.
He's had some success, but the measure has never made it all of the way through Congress. A section on exempting water and sewer PABs from volume caps was included in the Small Business and Infrastructure Jobs Tax Act of 2010, which passed the House but didn't gain traction in the Senate. In the 112th Congress, which ran from 2011 to 2012, Pascrell had 101 cosponsors for his bill. Also in 2012, the Senate-passed version of the Moving Ahead for Progress in the 21st Century transportation bill included a provision that would have exempted water and sewer PABs from state volume caps through 2017. However, the provision was cut during the House-Senate conference on the transportation bill.
Excluding water and sewer PABs from volume caps was included in some of President George W. Bush's and President Barack Obama's budget proposals. Obama's most recent budget request, for fiscal 2016, proposed creating a new type of PAB called qualified public infrastructure bonds that could be used for water and sewer projects and would not be subject to volume caps or the alternative minimum tax.
Timing is important for legislation to be enacted. However, "these problems don't go away. Water main breaks don't go away," Pascrell said. "They don't heal themselves."
The bill has the backing of water industry and financial sector groups. "There's a great deal of industry support behind it," Brown said.
"Congressman Pascrell is a dynamic leader in advancing sustainable public policies to create jobs and to rebuild infrastructure essential to local economies," Morgan said. "He is passionate in his efforts to increase investment in the nation's aging water and wastewater infrastructure, which in many communities is beyond its intended life cycle."
A State and Local Government Background
Pascrell, 78, gained experience with bonds while serving in the New Jersey General Assembly and as Mayor of Paterson, the Garden State's third largest city.
When he was mayor, "We bonded, had municipal bonds voted on by the city council and this was important, this was significant," he said.
He was elected to the New Jersey General Assembly in 1987, and three years later, he was elected Paterson's mayor. He held both positions until he joined Congress in 1997. He also worked as a high-school history teacher and an adjunct professor at Fairleigh Dickinson University. He served as president of Paterson's Board of Education and as a member of the board of trustees for Passaic County Community College.
Mayors of older cities like Paterson face issues, "and you can't wait until some group comes around that falls out of the sky to help you with your day-to-day problems," Pascrell said.
If mayors don't have the money to respond to problems right away, they put things off, but Pascrell hates to delay things and would rather find a way to solve problems immediately.
Pascrell said his experience as a mayor was priceless. "One of the major reasons why the Congress doesn't work is we don't have enough local folks who have come to their Congress after they were mayors or councilmen or selectman or whatever they call them in different towns," he said.
When Pascrell first served in Congress, he was on the House Committees on Transportation and Infrastructure and Small Business. "I'm glad I came in dealing with boots-on-the-ground issues and not esoteric interests," he said.
Since 2007, he has served on the House Ways and Means Committee, which has jurisdiction over taxes. When asked about tax reform, Pascrell said that former Ways and Means Chairman Dave Camp, R-Mich., "started out very well" with tax reform efforts but "then wound up in a partisan situation" and held votes on making expired tax provisions permanent without offsets.
The current Republican chairman of the committee, Paul Ryan of Wisconsin, also held votes on making expired provisions permanent as well as on repealing the estate tax. Bills like this increase the deficit, Pascrell said.
The Ways and Means Committee also has jurisdiction over funding for the Highway Trust Fund. The congressman recently sponsored a bill - H. R. 1846; Bridge to Sustainable Infrastructure Act -- that would index federal motor fuels taxes to inflation and create a bipartisan transportation commission to come up with ideas about how to permanently fix the HTF.
Pascrell said he does not want there to be another short-term extension of the HTF. "It creates greater anxieties about what are you going to do down the road when the money runs out," he said. "Why do you start a project if you're not sure you're going to get the money for the whole project?"
Pascrell also said he would support an infrastructure bank and has co-sponsored legislation on this in the past.
"The infrastructure bank is important," he said. "We need private enterprise, we need the public sector joining together."
BABs
Pascrell also supports reviving the Build America Bond program.
State and local governments could issue BABs in 2009 and 2010 and receive subsidies from the federal government equal to 35% of their interest costs. Pascrell has co-sponsored legislation in the past that would revive the BAB program with lower subsidy rates.
"Bonds to me are a way to do many of the things that we don't have the courage to do," Pascrell said. "You got private investment, not just totally public investment. And the government can't do it alone, and nor could private industry do it alone."
Issuers have expressed concerns about issuing Build America Bonds again because their federal subsidy payments have been reduced since March 2013 due to across-the-board spending cuts known as sequestration. The BAB bill Pascrell co-sponsored in 2013 would prevent BAB issuers from being hurt by sequestration. The congressman doesn't support sequestration.
"We should do away with it and face up to the reality," he said.
Toby Rittner, president and chief executive officer of the Council of Development Finance Agencies, said Pascrell has been "a true champion" of munis, including water PABs, BABs and disaster recovery bonds.
"The Congressman understands the important role bonds play in infrastructure and job creation," he said.
In the last Congress, Pascrell introduced a Hurricane Sandy tax-relief bill that would have waived certain mortgage revenue bond requirements for residences in that disaster area. The bill also would have created exempt-facility bonds called Hurricane Sandy Bonds that could be issued in New Jersey, New York and Connecticut to finance certain projects in the aftermath of the hurricane.
Pascrell is working with other members of Congress to introduce a broader version of the bill that would help victims of Sandy as well as other disasters.
Communities in his home state of New Jersey were hit hard by Hurricane Sandy. Pascrell said that Congress should provide tax relief to businesses that have been damaged by the storm.
"They're not in the same situation financially to pay their taxes [than] they were before. They need help," he said.
New Jersey has public pension challenges. Pascrell said that he would not support a reduction in pension benefits to current retirees unless they agreed to it.
"Does the system need to be changed? No question about it," he said. "But all the parties have to agree to it, not just the governor and the legislature."
Pascrell is critical of New Jersey Gov. Chris Christie, a Republican, noting that the state's credit rating has been downgraded several times during his tenure.
When asked about financially troubled Atlantic City, which is located in his state but outside his district, Pascrell said, "It's quite obvious for all the investment in Atlantic City, that investment has not really affected too much those people who are living below poverty [level]." But he added that Atlantic City Mayor Don Guardian has been working hard.
"As a Congressman, I'm trying to support towns. It's one of the things I have to look out for, whether it's in Montana or whether it's in New Jersey," Pascrell said.
